MUMBAI: India Infoline has upgraded ONGC from sell to buy and GAIL from market performer to buy.

The brokerage has reiterated market performer rating on RIL and Cairn.

India Infoline on ONGC

Upgrade from sell to buy

ONGC trades at a significant discount to its global peers on EV/boe

Discount warranted on the basis of the subsidy overhang

Expect discount to global peers narrow down

MRPL valued at Rs 40/share

Looking at a price target of Rs 1308/share on ONGC

India Infoline on GAIL

Upgrade from market performer to buy

Looking at a price target of Rs 499/share

GAIL expected to witness quantum jump in its transmission volumes

Exposure to city gas projects to be value accretive in longer term

India Infoline on RIL

Key factor for underperformance in markets due to pending litigations with RNRL

Anxiety over bidding price for LyondellBasell’s acquisition

These issues have created uncertainty on near term earnings

Possible negative outcome on RNRL case could impact FY10E earnings by about 10-12%

Revised target price lower considering weaker than expected petrochemical margins

New target stands at Rs1,038/share

Maintain market performer rating on the stock

India Infoline on Cairn

Current valuations factor higher long term crude oil prices

Revised production schedule have pushed peak production levels by one year

Target price change from Rs 257 earlier to Rs 247/shr

Retain market performer rating

Cairn continues to be the most levered stock to crude oil prices

One can adopt short term trading bets in relation to crude oil price movements